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An important article on sports costs

As was mentioned in the Lakers thread, pretty much everyone pays but not that many watch. I know that is hard for sports fans of their team to grasp because they are so avid for their team, but the vast majority of consumers do not watch sports....yet that is the content that is driving the costs.

A good article on this from the L.A. perspective, but it's not limited to Los Angeles.

We've gotten spoiled by the current RSN system. Up until the mid 90s many RSNs were only available as premium channels. Even Cablevision's own systems had MSG and FSN New York as premium channels up until 2003 when YES won the lawsuit to be placed on expanded basic. Before YES launched in 2002, we had to pay about $9 EACH for MSG and FSN New York, however after MSG lost the Yankees they moved half of the Mets games to MSG and merged the subscription for the channels.

I know that is hard for sports fans of their team to grasp because they are so avid for their team, but the vast majority of consumers do not watch sports....yet that is the content that is driving the costs.

There are similar problems with 3D; fewer than 120,000 viewers (nationwide on all carriers) at any one time yet DIRECTV chooses to bundle it with HD.

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Comparing sports channels to 3D is apples to oranges. There are a grand total of four 3D channels, and I doubt that their combined cost to DirecTV is as much as one of the newer sports channels or ESPN. Isn't Panasonic paying to have some of the 3D channels on DirecTV?

I too don't see the merit of introducing 3D into this discussion. I think the issue is simply that there are those people who simply don't watch sports and those people who do. Whether or not you feel the cost of sports programming should be spread evenly among all subscribers has a lot to do which which of those people you are.

I too don't see the merit of introducing 3D into this discussion. I think the issue is simply that there are those people who simply don't watch sports and those people who do. Whether or not you feel the cost of sports programming should be spread evenly among all subscribers has a lot to do which which of those people you are.

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Not necessarily. I love sports but do not feel like everyone should be forced to pay for them if they have no interest. If the channels didn't demand so much, if individual leagues, conferences, and teams didn't create their own channels perhaps I wouldn't feel the same way. But I do understand how ridiculous the costs are.

I saw the viewership numbers for the Angels games on their RSN and they were pitiful, like under 2% rating, I don't understand how the Dodgers and Angels think they can spend like the New York teams and the Red Sox and Phillies when it has not been proven that demand for a winning product in Los Angeles translates to the viewership needed to pay a Carl Crawford $20 million a year.

I'd be fine with all RSNs going a la carte just to put all these companies in their place, but you have all the old contracts to worry about. The problem with the whole pay TV industry is the content providers not having to live with what the end consumer actually wants to pay for their one individual channel or group of channels. Would love for it all to be transparent and move on.

The real truth is if there was a sports package with all sports channels in it, there would not be enough subscribers to be able to provide it at a reasonable cost. Sports must be distributed across all subscribers in order to provide it at a reasonable cost.

Exactly, and then maybe the prices would come down. I guess this is the same reason why a la carte won't work for non sports. I'm just sick of content providers not needing to deal with real customers.

Exactly, and then maybe the prices would come down. I guess this is the same reason why a la carte won't work for non sports. I'm just sick of content providers not needing to deal with real customers.

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They do deal with the real customers...it just isn't the viewer.

If a channel sells advertising, the real customer is the advertiser, not the viewer. The viewer is the product, which is delivered to the customer. The content is just the bait that attracts the product, much like a beekeeper provides an place for bees to build a hive, so that he can extract honey. Viewers complaining about the behavior of content providers are like bees complaining the hive is too crowded.

If a channel sells advertising, the real customer is the advertiser, not the viewer. The viewer is the product, which is delivered to the customer. The content is just the bait that attracts the product, much like a beekeeper provides an place for bees to build a hive, so that he can extract honey. Viewers complaining about the behavior of content providers are like bees complaining the hive is too crowded.

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Sounds good. Then the content providers can reduce their price to attract more viewers and get higher advertising.

I think the point that SR was trying to make is that the appeal of a single sports channel (RSNs in particular) is necessarily limited but everyone in the market is paying for it whether they watch it or not. 3D seems to have a severely limited appeal (in the tens of thousands of viewers) yet it is part of subscribing to HD service so it is being subsidized by tens of millions of HD subscribers who are not watching.

Getting all to pay for the enjoyment of the few isn't anything new at all in the world of sports, and it certainly isn't just about the sports channels either.

Look at all the sports arenas and other major/minor sports infrastructure and what you find in common is that most of them by a huge margin, were built on the taxpayer's dime with the revenue going to the owners of the team. You see it time and time again.

Living off those that don't watch/attend is something pro sports have done for many many years, with full cooperation from the local politicos.

If a channel sells advertising, the real customer is the advertiser, not the viewer. The viewer is the product, which is delivered to the customer. The content is just the bait that attracts the product, much like a beekeeper provides an place for bees to build a hive, so that he can extract honey. Viewers complaining about the behavior of content providers are like bees complaining the hive is too crowded.

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Look @ you city girl, talkin all about bee keeping. I take it you didn't grow up in the city.....

I'm not a sports fan. The only time I take an interest in sports is when a local team is about to head off into the playoffs. (e.g. 49ers, Giants, As). If I could drop E$PN and the R$Ns, I would in a heartbeat. Unfortunately, it's all about the potential number of eyeballs watching.